New Greek PM faces challenges | business | Hindustan Times
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New Greek PM faces challenges

business Updated: Nov 11, 2011 22:09 IST

Greeks lauded the nomination of new Prime Minister Lucas Papademos on Friday and expressed hope his government could put the economy back on track and calm political turmoil that has threatened to force Athens out of the euro zone.

But Papademos, a former vice president of the ECB, faces serious challenges at the helm of a new unity government forged this week after a chaotic power struggle between Greece’s two main political forces.

With a battle raging in Italy over a similar emergency cabinet, Papademos has 100 days to start fulfilling the terms of a €130-billion bailout plan aimed at keeping Greece solvent even as economists voice doubts over the euro zone’s future.

“It won’t be easy for Greece to get out of the tunnel but I hope Papademos will lay the ground for the Greek economy’s revival,” said Maria Apostolou, a 42-year-old trainer. “I am really happy he’s not a politician... So it’s better to have technocrats governing us.”

Papademos must pass an austere 2012 budget, sell off state-owned companies, tackle rampant tax evasion and start chipping away at a mountain of debt under a bailout agreed among euro zone leaders last month.

The initial optimism masks the fact that many Greeks still bridle at the idea of more tax hikes and cuts to public salaries and pensions after austerity measures expected to send the economy into a fourth straight year of recession.